Retirement community contracts can feel a little… intimidating. Between the legal terms, healthcare details, and financial fine print, it’s easy to feel like you need a law degree just to keep up.
Good news: you don’t.
Our senior living community in Lancaster, PA is here to take the confusion out of contracts! This blog will outline the five types of CCRC contracts you need to know, so you can feel confident before putting pen to paper and making your move official.
NOTE: This blog is for informational purposes only and should not be taken as legal or financial advice. Please consult your attorney, financial advisor, or other qualified person for professional advice.
What Are the Types of CCRC Contracts?
A CCRC contract is the agreement you sign before moving into a continuing care retirement community (CCRC). It outlines everything from your monthly fees and amenities to what happens if your healthcare needs change later on.
In short, it’s the roadmap for your future lifestyle and care.
And because there are several different types of senior living contracts, it’s important to understand what each one includes—and what it doesn’t.
| Contract Type | Upfront Costs | Monthly Fees | Healthcare Coverage | Best For |
| Type A: Life Care | Highest entrance fee | Highest monthly fees | Includes most healthcare services at no additional cost | Those expecting significant long-term healthcare needs |
| Type B: Modified Life Care | Moderate entrance fee | Lower than Type A | Limited or discounted healthcare coverage | Healthy individuals wanting partial healthcare protection |
| Type C: Fee-For-Service | Lower entrance fee | Lowest monthly fees | Pay for healthcare only when needed, usually at market rates | Those who don’t expect long-term care needs |
| Rental | No entrance fee or small community fee | Higher monthly rent | Healthcare not guaranteed and billed separately | People wanting flexibility without tying up assets |
| Equity | Purchase or equity investment required | Monthly community fees | Healthcare not guaranteed and billed separately | Those wanting homeownership benefits and estate value |
Type A: Life Care
Think of Type A as the “all-inclusive resort” of CCRC contracts. This type of CCRC contract is the most comprehensive option, and typically the most expensive. You’ll pay higher entrance and monthly fees, but most healthcare services are included later on, including rehab and skilled nursing. As you age and your health needs change, your monthly fees won’t.
With CCRC life care contracts, you’re pre-paying for future care, ensuring financial predictability down the line.
Pros:
- No surprise medical costs — With Type A CCRC life care contracts, your monthly payments will remain relatively stable, even if you need more advanced care in the future.
- Tax benefits — In most cases, a part of your entrance fee is tax-deductible as a “prepaid medical expense.”
- Convenience — If your healthcare needs change, you can receive additional medical support without leaving the community you already love.
Cons:
- More expensive — Type A contracts come with the biggest price tag compared to other types of senior living contracts.
- You may pay for care you never use — If you remain healthy for years, you might not take advantage of all the included healthcare services.
BEST FOR: Those who want long-term financial predictability and expect they will need more healthcare support later in life.
Type B: Modified Life Care
Looking for something in the middle? Type B contracts offer a nice balance between upfront affordability and future healthcare protection. With this option, entrance and monthly fees are lower than Type A. If you need healthcare services later on, they may be included for a limited time or offered at a discounted rate before market pricing kicks in.
This type of CCRC contract is a little like having a healthcare safety net, without paying top dollar upfront.
Pros:
- Lower upfront fees — This type of senior living contract offers lower entrance and monthly fees than Type A.
- Discounted healthcare— If you need additional care, you’ll typically pay less than standard market rates.
Cons:
- Moderate financial risk — Once you exceed the included care limits or discount period, healthcare costs can rise significantly, becoming more expensive than Type A.
BEST FOR: Folks who are healthy now but want partial protection against future healthcare expenses.
Type C: Fee-For-Service
In a fee-for-service model, you’ll enjoy even lower entrance and monthly fees compared to Types A and B. However, these fees will increase as you need more medical help, usually at the market rate. This means you only pay for what you need, when you need it.
Here in Pennsylvania, Tandem Living is a fee-for-service CCRC! Residents at Woodcrest Villa (our independent living campus) enjoy all the included amenities. If additional care becomes necessary, you can pay to transition to Trillium Place (our care campus), just minutes away. So don’t worry, you won’t be far from the fun.
And here’s the good news: we know life throws unpredictable things your way. That’s why we provide benevolent funds for residents who outlive their financial resources, generously donated to help us support residents no matter what happens.
Pros:
- Only pay for what you need — Don’t worry about paying for health services you never use.
- Lower monthly fees — Type C has the most affordable monthly costs.
- Flexibility — Pick and choose which services you want to pay for, and ignore the rest!
Cons:
- Highest financial risk — Costs can rack up quickly if you need long-term healthcare.
BEST FOR: Those who want lower upfront costs and don’t think they’ll need long-term care.
Rental Contracts
Not ready for a large entrance fee? Rental contracts offer a simpler, more flexible option. In this model, you typically pay monthly rent rather than a hefty upfront entrance fee, but there may be a small community fee. While monthly costs are often higher, you gain flexibility and avoid tying up large amounts of money. The tradeoff is that healthcare services are not guaranteed.
Here at Woodcrest Villa, we believe in giving our residents the freedom of choice, which is why we also offer rental agreements. However, most folks choose a Type C contract.
Pros:
- Avoids a large entrance fee — Save costs upfront by skipping the entrance fee.
- Flexibility — Month-to-month agreements make it easier to move out if your needs change.
Cons:
- Higher monthly fees — Your monthly costs are higher, and rent may increase with inflation.
- No healthcare guarantee — Health services are billed separately at market rates.
- No priority access — You may not receive priority placement for healthcare services within the community.
BEST FOR: Those who want more flexibility and don’t want to tie up their assets in a large entrance fee.
Equity Contracts
The last type of CCRC contract is an equity contract. It works a bit more like traditional homeownership. Instead of paying only an entrance fee, you purchase your residence—or buy into an ownership share—while also paying monthly community fees. Depending on the agreement, your heirs may receive a portion of the home’s value when you pass on.
Typically, health services are offered at no discount.
Pros:
- Asset appreciation— As time passes, your real estate investment may grow in value.
- Tax benefits — Just like a traditional homeowner, you may qualify for certain tax deductions.
- Access to equity — Home equity can help cover future healthcare costs if needed.
Cons:
- Market rate healthcare — This contract receives no healthcare benefits, forcing you to pay full price.
- Financial responsibility transfers to heirs — If you die, your heirs will be responsible for paying the fees until the unit sells. Because of the age and financial specifications of most retirement communities, there are fewer qualified buyers.
BEST FOR: Folks who want to build up real estate assets for their family and keep the benefits of homeownership.
How to Make a Smart Decision Before You Sign
Before choosing a contract or joining a waitlist, take some time to think about your priorities—not just for today, but for the future, too.
Ask yourself:
- What’s my budget for an entrance fee?
- Would I rather pay more upfront or later if healthcare needs arise?
- How important is long-term financial predictability?
- What healthcare needs might my spouse or I have in the future?*
- How long do I plan to stay in the community?
- What amenities matter most to me?
*Remember, folks aged 65 and older have a 70% chance of needing some sort of long-term care down the road.
Lean On Your Counselor
You don’t have to figure this out alone. A senior living counselor can explain the details of each contract and answer questions along the way to make this transition easy.
Here are a few smart questions to ask:
- Is the entrance fee refundable?
- What does the monthly fee include?
- What services cost extra?
- What happens if I need a higher level of care later on?
Read the Fine Print Carefully
Yes, it’s long. Yes, it’s detailed. But understanding your contract matters. Have a trusted family member or friend review it with you, too. Make sure you fully understand the type of CCRC contract you’re reading, healthcare coverage, fees, cancellation terms, and any future obligations.
Make Sure the Healthcare Fits Your Standards
A community may offer healthcare services, but are they quality services? Do your research to check that the community can meet your needs and standards. At Trillium Place, residents have access to award-winning care. In fact, it won Newsweek’s list of Best Pennsylvania Nursing Homes in the 150+ bed category!
Check Financial Stability
You’re investing in your future, so financial strength matters. If you’re curious about Tandem Living’s financial status, you can read our Financial Strength & Accountability Statement or request our Annual Disclosure Statement.
Most Importantly… Get Excited
Moving into a retirement community isn’t just a financial decision. It’s the start of a brand-new chapter filled with opportunities, friendships, hobbies, events, and freedom from everyday home maintenance. Once the paperwork is done, the fun begins.
CCRC Contract FAQs
We’re Waiting to Welcome You Home
If the flexibility of a Type C contract or rental agreement sounds like the right fit for you, we’d love to help you explore your future in Lancaster, PA. Read our price sheet to get a better idea of estimated monthly fees.